Furthering the downfall of Adani, their Adani Total Gas in partnership with TotalEnergies suffers thr brunt of the Hindenburg report.
What is happening: The joint venture between Adani companies and TotalEnergies- Adani Total Gas has seen a plunge in its gas shares with a fall of 75%.
Why it matters: The fall in shares is troublesome to say the least because when TotalEnergies acquired 37% of the firm back in 2019, it set the template for the group to rope in global investors which now seems precarious at best.
Backdrop: Adani Total Gas is the largest customer of the joint venture between an Adani Ports subsidiary and TotalEnergies, accounting for over half of its revenue.
This fall not only affects Adani but TotalEnergies just as much.
The big picture: The Adani Gas-TotalEnergies deal set the template for bringing in other global strategic investors which would have been a key enabler of the group’s capital-heavy expansion.
It gets more muddled given the context that TotalEnergies has already put its plan to buy 25% of Adani Enterprises’ green-hydrogen venture that was announced back in June last year on hold.
The numbers: A little longer than a month back, Adani Total Gas was worth almost $52 billion, making it the most valuable Adani company.
But now post the Hindenburg report, Adani total Gas market cap is less than one-third of the initial $52 billion.
What else: Despite the drastically falling stocks, Adani Total Gas continues to be TotalEnergies’ largest and most lucrative bet in the current times.
TotalEnergies’ stake in the company is now worth approximately $5 billion which is 7 times a return on its investment.
Read in short: Adani Total Gas, just like every other adani venture at this point too faces a huge fall in its shares but hope still exists given that the venture has shown a 7x return on investment to TotalEnergies which is not a small feat.